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Saturday, December 3, 2022

China Police Detain Crypto Traders on Money Laundering Crackdown

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Chinese police are stepping up efforts to crack down on illegal economic activities, leading to crypto over-the-counter (OTC) traders being detained to assist investigations.

Zhao Dong – a prominent Chinese crypto OTC trader and the co-founder of crypto lending platform RenrenBit – has been held up by police in the city of Hangzhou, as later reported by local news outlets.

In 2017, the Chinese government prohibited local crypto exchanges from allowing trades between cryptocurrency and Chinese yuan.

Many traders turned to OTC platforms as a result, which essentially enable peer-to-peer trading by connecting buyers and sellers. Individual users in China have been relying on OTC desks to buy or sell USDT or bitcoin with Chinese yuan to participate in crypto-to-crypto trading.

The latest action by Chinese police follows a wide bank account freeze reported in early June, where more than 1,000 people were estimated to have been affected.

At the time, a wide range of OTC desks and users in China had their bank accounts frozen by law enforcement after being suspected of either knowingly or unknowingly facilitating illegal activity, such as telecom frauds or ponzi schemes, to launder proceeds via crypto OTC trading.

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